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Exhibit 10.1 HYDRIL COMPANY
2004 DIRECTORS DEFERRED SHARE UNIT AGREEMENT This Directors Deferred Share Unit Agreement (the Agreement) is entered
into by and between Hydril Company (the Company) and _________________   (the
Director) as of ____________   (the Date of Grant), pursuant to the terms
and conditions set forth in this Agreement. 1. Grant of Deferred Share Units. The Company hereby grants to the
Director 2,500 hypothetical shares of the Companys common stock, which shall
be credited to a bookkeeping account with the Company. Each such hypothetical
share will be equal in value to one of the Companys currently outstanding
shares of common stock, par value $0.50 per share (a Share). 2. Vesting and Settlement. This grant vests and becomes payable in full
three years from the Date of Grant, if the Director remains a member of the
Companys Board of Directors (Board) at such time, or upon termination of the
Directors status as a member of the Board other than by reason of either cause
or voluntary resignation without the consent of the Board, if earlier. Unless
the Director elects to defer payment hereunder in accordance with Paragraph 3,
upon full vesting the Director shall be entitled to a payment equal to the fair
market value of 2,500 Shares calculated as of the applicable of the expiration
of the three-year term or termination of status as a director (the Settlement
Date), determined for this purpose in the same manner as Fair Market Value
is determined in the Incentive Plan. Such payment shall be made solely in
cash. Notwithstanding the foregoing, if at any time prior to full vesting as
described above, the Company should cancel or settle its obligations under the
Incentive Plan as a result of a corporate transaction, the Directors grant
hereunder shall immediately vest and, unless the Director elects to defer
payment hereunder in accordance with Paragraph 3, a cash payment shall be made
to the Director in an amount to be determined as of that date in accordance
with the valuation procedures outlined in the Incentive Plan. 3. Deferral of Payment. Subject to the provisions in and procedures
established by the Companys Board of Directors, the Director may be afforded
the opportunity to elect to defer the receipt of payment hereunder prior to the
date this grant vests. 4. Dividends. An amount equivalent to the value of any dividends paid on
2,500 Shares during the period beginning on the Date of Grant and ending on the
Settlement Date of the Companys obligations hereunder shall be credited to the
bookkeeping account maintained for the Director and, unless the Director elects
to defer such payment in accordance with Paragraph 3, paid in cash to the
Director when the Companys obligation under this Agreement is otherwise
satisfied pursuant to Paragraph 2. 5. Adjustments. In the event of any subdivision or consolidation of
outstanding Shares or a declaration of a dividend payable in Shares, or a
capital reorganization, reclassification or other transaction involving an
increase or decrease in the number of outstanding Shares, an appropriate
adjustment, in the manner provided in Paragraph 15(b) of the Incentive Plan,
shall be made to the grant or number of Shares subject to the grant under this
Agreement. 1




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6. Assignability. Neither the grant nor any other rights of the Director
under this Agreement shall be assignable or otherwise transferable except by
will or by the laws of descent and distribution. 7. Governing Law. This Agreement and all determinations made and actions
taken pursuant hereto shall be governed by and construed in accordance with the
laws of the State of Delaware. IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its officer thereunto duly authorized, and the Director has
hereunto set his hand as of the day and year first above written. HYDRIL COMPANYBy:Name:Title:DIRECTORBy:Date:
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